Bank of Canada Keeps Rates Low Despite Robust Growth

(Reuters)

The Bank of Canada held its key interest rate at a record low on Tuesday, but signaled it is getting closer to raising rates, though promising again not to do so before the third quarter.

The central bank reiterated the commitment it made in April 2008 to keep its target overnight rate at a record low 0.25 percent until the end of the second quarter, conditional on inflation staying on track.

In its policy statement, however, it acknowledged stronger-than-expected economic growth and inflation and it removed a reference to downside risks to its inflation outlook that had been present in previous statements — all suggesting a slightly more hawkish stance.

“This is a statement that is a little stronger than in the past,” said Eric Lascelles, chief economics and rates strategist at TD Securities. Read more here.

To view the Bank’s policy statement click here.